Telstra butts heads with Optus and Vodafone over 5G rollout plans

Telstra has ramped up plans to roll out 5G network infrastructure more than a year before consumers will have new generation devices capable of using the faster technology, but the telco giant's rivals have rubbished claims this will give it an edge in the hyper-competitive mobile market.

At a Gold Coast telecommunications conference set to ratify technology standards for 5G networks, spectrum, systems and devices – to ensure devices work in all corners of the world – Telstra chief executive Andy Penn said Telstra was working hard to progressively add 5G capability to its mobile network towers.

"We've already lit up 15 mobile, 5G-enabled mobile sites, our aim is to increase that to 200 by the end of this calendar year and continue to roll out into 2019," Mr Penn told The Australian Financial Review following his keynote speech.

Telstra boss Andy Penn believes having 5G networks ready well before handsets are available will give it an advantage. Arsineh Houspian

"What that does is it enables us to trial and test those early devices in a pre-commercial environment ... and not test them in a lab. When the mobile handsets become available; we're really dependent on the chipset manufacturers, and the handset manufacturers for that."

The rollout of 5G technology is crucial for Mr Penn and his plan to turnaround the under pressure telco incumbent. The Telstra2022 turnaround strategy, which Mr Penn unveiled in June, will rely heavily on 5G reviving the telco's earnings and making up for a collapse in profits from reselling internet access via the National Broadband Network.

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However, Mr Penn's claims that getting a headstart on the infrastructure rollout will help Telstra gain an edge sparked a robust rebuttal from his peers.

"We're taking a real-world approach to 5G by evolving our network in a way that allows customers to take advantage of upgrades and enhancements now," Mr Millroy said.

"Given 5G devices are at least a year or more away, 5G-only equipment on towers is of no use to consumers at the moment."

Upgrading towers

Mr Millroy said Vodafone, which is set to merge with TPG Telecom, is working through a virtualisation project on its network in anticipation of 5G as well as adding fibre to its mobile tower networks. However, it has upgraded its towers to use what it calls 4.9G, which it says its customers in western Sydney are already using.

"We carried out Australia's first live 5G demonstration in late 2016, and once 5G spectrum is available we'll begin 5G trials ahead of rollout," Mr Millroy said.

Telstra has some 3.4GHz spectrum in metro and regional areas, but importantly none in Sydney and Melbourne that it can use for 5G, so November's auction will be critical for the telco.

"The reality is, unlike Optus, none of our competitors have the spectrum assets required to deliver a true 5G experience," Optus vice-president of regulatory and public affairs Andrew Sheridan said.

"Optus is advanced in our planning for our commercial rollout of 5G technology in late 2018 to offer customers with fixed wireless services in early 2019; this will be the first real 5G opportunity for consumers. With a lack of available commercial mobile handsets until well into 2019, talking up 'leadership' or a first mover advantage is more vapourware."

As far as helping Telstra with its future earnings, Mr Penn believes 5G will see a massive expansion in demand for data, not just on a consumer basis, but via the mass automation of industries, including mining and agriculture.

Telstra is also betting its Network Applications Services division, which offers cloud storage, data centre management, security and monitoring services, will also benefit from the rollout of 5G.

"It will enable the physical world to be infused with the digital," Mr Penn said.